NASSCOM India ITES-BPO Summit 2006

Alexander Campbell

UBS AG, Head of Human Capital Management

Attracting, Managing and Developing Talent

June 2006

2

Content of Presentation

1. About UBS

2. Focus of UBS Group HR

3. UBS in India

4. Challenges

5. Conclusions

SECTION 1

About UBS

About UBS Globally

5

UBS's positioning today

UBS

World's largest wealth manager

CHF 1,822bn in invested assets

- WM: CHF 944bn

- WM USA: CHF 728bn

- BB: CHF 150bn

Wealth Management

Best global Private Bank (Euromoney)

Wealth Management USA

4th largest full service US broker (15 % market share)3

Business Banking Switzerland

25-35% of Swiss banking market

Global Wealth Management & Business Banking

#1 global secondary equity

cash commissions

#1 global equity capital

markets (8.5% market share

of volume)

#2 FX franchise (12.5%

market share)

#7 global Investment

Banking fee pool (5.0%

market share)

Leading global FIRC franchise

Investment Bank

Leading institutional and

wholesale asset manager

CHF 737bn invested assets

- Institutional: CHF

425bn

- Wholesale: CHF

312bn

Largest fund house in Europe

Largest mutual fund manager

in Switzerland

2,797 employees located in

20 countries

Broad based product offering

Global Asset Management

1 Market capitalisation as per 01.11.20052 Financial Businesses only3 As per 2Q05

CHF 2.7 trillion invested assetsOver 70'502 employees2

CHF 125 billion market capitalization1

CHF 39.0 billion equity (to UBS shareholders)

Wealth Management

Wealth Management USA

Business Banking Switzerland

6

This is who we are...

This is who we are not...

Niche firm

Narrowly defined markets, geographies, or opportunities

Limited economies of scale Limited diversification benefits

Conglomerate

Horizontally aligned business Substantial challenges to

management resulting from complexity of operations

Focused on securing global leadership positions in:— Wealth Management— Asset Management— Investment Banking

Business Banking Switzerland to exploit economies of scale

Targeting above GDP growth businesses

Integrated model as key differentiator – "One Firm" approach

Globally focused model

Leveraging the platform for growth

7

Bank in Winterthur

Dillon Read

1997

S.G. Warburg Group

1995

Brinson Partners

1994

O’Connor & Associates

1990

1998Phillips & Drew

1986

Interhandel

1967

Eidgenössische Bank

1945

Swiss Bank Corporation

Union Bank of Switzerland

SBV

3 CH Banken

1897

Toggenburger Bank

1912

1862

1863

Basler BV

Basler Bankenkonsortium

Frankfurter BV

1872

SBG

Paine, Webber, Jackson & Curtis1942

PaineWebber Inc.1974

2000

Schröder Münchmeyer Hengst & Co.

1997

Growth through M&AOrganic growth

Reaching for the top

8

When

Principal Driver

Examples

UBS’s cumulativetotal return toshareholders relative to DJ World Bank index since 1990*

Establish the Platform Develop the Platform

Up to 2000

M&A

S.G. Warburg UBS-SBC PaineWebber

+94%

Post 2000

Organic growth

US Investment Banking European Wealth

Management FX repositioning APAC footprint Supplemented with

in-fill acquisitions

+145%

* Total Return is based on Datastream data from end of 1990 to 23 September 2005 in CHF and adjusted for stock splits. Dividends are reinvested, share buybacks reflected in the share price. UBS’s pre-1997 numbers have been combined pro forma for UBS and SBC

Two main phases in corporate development of UBS

9

RiskManagement

ITI CommunicationControlling TreasuryHuman

Resources

The integrated business model at work15–20% of market capitalization is due to the integrated business model

Global Wealth Management & Business

Banking

Global Asset Management Investment Bank

Corporate Center

Funds

NNM inflow

DerivativesResearch

Trade flows

Trade flows

Structured products Corporate finance advice

SECTION 2

Focus of UBS Group HR

11

Focus of Group HR

Facilitating integrated business model: “one firm“

Balancing HR requirements of the Group with those of the operating divisions

High potential identification and development, & senior management succession

Managing appraisal and creating a performance culture

Managing key incentive programs

Setting global recruitment standards and opening the internal labor market

Implementing common HR policies & platforms where desirable

Management of HR Shared Services & outsourcing/offshoring

12

Resourcing: Our challenges

Workforce planning & controlling

Attraction Selection Integration

Creating a robust resource planning methodology

Aligning resourcing model to strategic growth

Opening the internal labor market

Ensuring consistently high recruiting standards

Common processes and policies being developed: eg. internal sourcing policy, unified job advertising, data banks of key skills

13

Talent Development & Management Overview

UBS Strategy

Talent strategy

From M&A towards organic growth

From talent acquisition towards talent development

Talent by Acquisition

Recruiting

Identification

Selection

On-Boarding

Talent by Development

Identification

Talent Pipeline

Succession Planning

Development

Integrated Approach

14

Identification of High Potentials

Performance: Extraordinary performance track record over the last 2 years. In particular, they should have demonstrated ALL of the following competencies:

Learning agility – active in the pursuit of and engagement with feedback and alternative perspectives aimed at improving own performance & style

Mastering complexity & change – quickly assimilates complex information, deals with ambiguous situations and engages with change

Awareness of self & others (emotional intelligence) – awareness and management of self and others and ability to use this to lead

Drive and commitment – ambition, capability and determination to succeed

Working in partnership – working collaboratively, high influence,establishing relationships

Resilience and managing stress – coping mechanisms, ability to manage and reduce stress for others

Top Leadership

Talents (TLT)

GMB

High Potentials

SuccessionCandidates

Key Position

GMB SC

15

Integrated key talent management—overview

Management of Key Talents:

Succession Candidates

High Potentials

all UBS employees

“UBS Leadership Pipeline”

GMB

Key Position Holders

GMB SCs

GEB

Top

Tale

nts

Development & career review process

Identification of suitable development opportunities & career moves

Implementation of agreed development measuresAccelerated

Leadership Experience

GLE 1GLE 2GLE 3

SLC

ASF

Top Talents

GEB & GMB

Selected Succession Candidates

Key Position Holders

&

Program Target Audience

UBS Leadership Insitute Development Architecture

Mentoring

16

Leadership Institute: Group-wide ProgramsOn the top level the programs are integrated across BGs.

GEB

& GMB

KEY TALENT

Group Mentoring

Annual Strate

gic Forum

Senior Leadership Conference

Global Leadership Experience Programs

Accelerated Leadership Experience Program1

Investment Bank

Global Asset Management

Corporate Center

Wealth Management &

Business Banking

Wealth Management

USA

Note: 1 Focus on high potentials – not top leaders

17

Appraisal (PMM) – Process and Benefits

♦ provides a consistent way to define, track and measure objectives and results

♦ reinforces our corporate culture and the “one firm” approach♦ provides a common performance management architecture whilst

respecting & valuing the different businesses and business models across the Group

♦ stimulates organizational commitment♦ fosters a climate of continuous learning and professional growth

18

Global Competencies

InnovationInnovation LeadershipLeadership Planning & Organising

Planning & Organising

Business & Financial Focus

Business & Financial Focus

Communication & Impact

Communication & Impact

Developing Self (Learning)

Developing Self (Learning)

Drive & Commitment

Drive & Commitment

Judgement & Decision Making

Judgement & Decision Making

Managing & Developing

People

Managing & Developing

PeopleProblem Analysis

Problem Analysis

Quality & Continuous

Improvement

Quality & Continuous

Improvement

Resilience & Stress

Management

Resilience & Stress

Management

Strategic Perspective &

Global Awareness

Strategic Perspective &

Global Awareness

Integrating Diversity

Integrating Diversity

Professional Behaviour

Teamwork

Technical / Specialist

Knowledge

Client Focus

19

HRIT is critical COMPONENT SIGNIFICANCE FOR HR

Unified Foundation (based on Oracle / People Soft

Firmwide Performance Measure-ment and Management System

Firmwide Compensation Management System

Global Reporting Warehouse

Shared Recruiting System

Consolidated Learning Platform

Enables HR data management (this includes HR Self Service modules)

Allows cross-Business-Group 360° reviews

Supports Group Compensation Strategy

Enables comprehensive reportingand analysis

Allows firmwide job boards and shared candidate pools

Combines learning administrationand E-learning capabilities

20

Tier 0Self Service – web,IVR and knowledge

base

Potential Future HR & L Operating Model

Client EmployeeBusiness Leaders

Retained HR&L Shared Service activities

Business Group aligned activities

Key

Outsourcing/ off-shoring potential

CRM Service

s

Tier 1Simple Inquiry

and Operational

Support

Tier 2Complex

Inquiry and Operational

Support

Line Manager

Tier 3Retained SME,

policy and Exception

Management

Talent & Perf Management

HR Strategy & Mgmt Support

HR Analytics

Business Group

Compensation

Business Group Specific Prof &

Campus Recruiting

Learning

Business Group Specialists

Contract(s) Management

Service Management Organization

Contract(s) Monitoring

Regional HR & Learning Services

DiversityRecruitment

Strategy

Employee Relations(Specialist Advice, Legislative and

Compliance)

Benefits Strategy

Regional Compensation

LearningExecutive

Recruitment

Manager Recruitment

Referral Recruitment

Campus Recruitment

FA Recruit.. (WMUS)

Payroll Delivery and

Admin

Benefits Delivery & Admin

Learning Administration

Data Management

Prof (Mass) Recruitment

Prof Recruit (Non-Regular

EEs)

Employee Relations

Operational Activity

Comp Delivery & Admin

Commissions Admin (WMUS)

Recruiting Process Delivery

& Admin

Campus Recruitment

HR Reporting

Inquiry Management & Cross-functional Administration and Operational Support (ASC)

Contact Center

Performance Management

Coach/Advisor to Mgmt

People Strategy for the

business

Business Leadership

Support

Business Partners/ HR

CRMs

Learning Operating Model still to be confirmed

SECTION 3

UBS in India

22

About UBS in India

Investment Banking presence in Mumbai (52 staff)

Banking license applied for– Expansion of IB activities

– Basis for growing an onshore Wealth Management Business

Indian Service Centre, Hyderabad– Both Knowledge Working & BPO

– Currently 160 staff in IT Production, IB Analytics and IB documentation

– Estimate 500+ staff by end 06; scaleable 2000+

– Managed Services Model (SLA‘s) or offshore Extension Model

23

Recruitment challenge in India

Sources Deployment

Competitors + Knowledge working ISC

IIM Global recruitment / KPO ISC

IIT

Other universities KPO/BPO/ISC

Local colleges BPO

+ MBA, M. Com / B. Com, CA/CFA, B. Eng

24

Key Elements of talent management strategy for India

Intensive marketing effort to target academic institutions

Reinforcement of UBS brand

Emphasis on selection testing/high entry standards

UQ + total fixed pay

KPI based appraisal

Significant variable pay driven off KPI‘s

Formal job descriptions, KPI‘s and competency framework

Competency based career development model

Career opportunities in India and elsewhere

Part of UBS family/offshore management involvement

Effective employee communication

25

Sample Job Description: Analyst

Statement of purpose: To support the Investment Banker / Onshore Analyst in preparing pitches / presentations to clients by conducting research within clearly laid-out formats and structure, in areas such as Healthcare, Technology and M&A.

Job Description

• Broad components of the role– Create sector and company analysis for various comparable data – Summarise developments in clearly identified topics for the companies /

sectors identified – Update comparables / profiles on a continuous basis for the companies – Create a short profile (1-3 page), long profile (8-10 pages) or specific

components of a pitch book

26

KPI’s: Analyst

Managers

Feedback from onshore banker / analysts

Quantity of work in terms of number of profiles

Quality in terms of number of and type of revisions

Attitude – flexibility, helping others, stretching, …

Competency enhancement

Manager’s feedback

Analyst

• Feedback from onshore banker / analyst

• Throughput in terms of number of profiles

• Utilization• Manager’s feedback• Peer feedback• Process improvement

suggestions

KPIs

27

KPI Weighting: Analyst Example only

Eventual KPIs

Srl Description Weight

Client Feedback         Direct structured feedback from onshore analysts / bankers for each deliverable         A surrogate could be the buddy gives feedback for each deliverable (Accuracy of Information: Thoroughness / Innovation, Adherence to instructions, Communication, Attention to detail)

2 Weighted average number of profiles completed 15%

4 Manager’s feedback primarily on attitude & flexibility 10%

6 Competency enhancement 5%

5 Peer Feedback 20%

1 40%

3 Number of errors: omissions and mistakes 10%

Bonus computation

28

Competencies: Analyst

Personality traits (PT) and CompetenciesManagers

PT– Number oriented

– Detail oriented

– Curiosity

– Drive & commitment

– Hard working

Competencies– Ability to work on comparables and

valuation

– Ability to communicate well with the onshore analyst

– Plan work and time well

– Be flexible and work to client schedules

– Be a good team player

Analyst

• PT• Number oriented• Systematic• High intellect

• Competencies• Oral and written

communication skills• Analytical skills• Be a good team player

29

Training & Development

UBS/ ISC

overview

UBS/ISC

Culture

UBS Values

Policies & Procedures

ISC Level/ Vertical Level Exposure

UBS Leadership Institute

Refresher on UBS

Customer service

Language & communication

Culture

Team work

Change

Management

People : Leadership Foundation program

UBS Policies Implementation

Interviewer Certification program

Operations Management

Process based

Need based

Team, Cross functional and Operations management

Interviewer Certification Program

Six sigma Green belt

Project based

Need based

Stepping up to Leadership

Project management

Interviewer Certification programNew hire

Orientation

Trainees/ Entrants to New domain

Team LeadManagers

Operations Mngr

Vertical heads

New Joinees

Agents

First time leaders

Managers

Extended Leadership team

Leadership Team

(Cross) Cultural Training- mandatory for all levels:

1. Level One for the first 3 groups and

2. Level Two for the rest- based on specific need

SECTION 4

Challenges

31

Challenges to success in India

Global/local interface– Governance

– Management via SLA‘s

– Effective delegation

– Managing matrices

Local Labor Market– Competition for key skills

– Indian campus recruitment methodology (Day zero etc.)

– Cost inflation – the y-o-y increases can shock any overseas client! (despite the denominator)

– Language skills

– Avoiding over recruitment

– Attrition

32

Challenges to success in India (cont.)

Culture– Anglo Saxon Individualism vs Indian collectivism

– Meritocracy vs Hierarchy

– Individual accountability vs group loyalty

– Explicit communication: conflict and disagreement are acceptable

– Different concepts of time

– Documentation & approval mechanisms (contract based rather than relationship based)

Politico/Economic– Infrastructure (although lots happening)

– Legal system (slow)

– Data Security (are concerns valid?)

– Lack of awareness of India Inc.

33

A sustainable strategy…

Market growth requires innovative resourcing strategy

Parallel ramp-ups by new players can spike attrition– Yes, to some extent it is inevitable; but ‘no poach’ clauses are not the solution

Need concerted effort to INCREASE the employable pool (as differentiated from the available pool).– next slide illustration

This is possible by using advanced Assessment & Testing tools; and – building robust Internal Training Engines

– Industry-initiatives to bring up Graduate pool to required employable standards

– Catch ‘em Young- introducing domain or vocation courses into mainstream education curriculum (this has already been done by technology players, and it is time for the Knowledge players to do the same)

34

An Illustration of Expanding the pool

0%

20%

40%

60%

80%

100%

KPOSkills

BPOSkills

CRM

Direct Reject

Indirect Fit

Direct Fit

0%

20%

40%

60%

80%

100%

KPO Skills BPO Skills CRM

Reject

Direct Fit

Trainable Pool

35

An Illustration of Expanding the pool and Keeping costs low

1

2

3

Laterals- Direct Exp

Freshers/No Domain Exposure

70%

50%

20%

0%

20%

50%

30%

30%

30%

Laterals- Related ExpRecruitment Wave

SECTION 5

Conclusions

37

Conclusions

UBS is committed to India and sees huge opportunities

UBS‘ challenges are India‘s challenges

NASSCOM has key role particularly in relation to standards and training

Questions